So I have seen many references to people wanting to cash flow $100 per door on a property they are investing in. Sounds to me like a reasonable and achievable goal. However, I keep feeling like there is a component missing here that I haven't heard addressed and that is the notion of what you had to put into the property. Maybe if you have it 100% financed this doesn't matter. But if you have say 20% of your own money in the property it feels like I am missing the notion of cash on cash return. If your upfront investment of cash out of your pocket is say $1million for one unit, getting $100 would be a terrible investment. Now obviously that is an extreme and ridiculous situation that (I hope) nobody would ever do, but it still feel to me like if you say $100 per door, it should be with a cost basis or a cash out of pocket per door of $X. Need some notion of relative value.
If that's right, what do people usually target as $X? Or am I just mixing and matching concepts and off in the woods?
Thanks for your feedback.
@Michael C. Interrsting points,however;most of the 100$ per door concept are in passive income. This is $100 after PITI,all bills, reserves and vacancies.. Many REI want passive income and often$100 per door per month is sufficient for investors... Everyone is different,but for a million dollar investment,I'll hope to get at least 10 units rented it one!
Which is a big reason why even being no cash in, all leverage, I don't accept less than 300/door.
There is not one answer for all RE @Michael C. On a single-family, $100/door may be paltry in some areas, especially if one put down $20k or something. $100/door with a DP of $500 in the midwest sounds outstanding. I shoot for a cash-on-cash of about 20%. Takes some of the per door variations out. The rule is to disseminate from a multi-unit, so it isn't $100/property. It's just generic like other % rules some have.
$200 per door, $100 is too skinny, it's very risky in case a big ticket item or eviction occurs.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.